Retailing for Musicians: Harnessing the power of direct-to-consumer sales

With streaming providing less than ideal revenue, direct to fan merchandise sales are a particularly important source of income for those artists who take the time to do it well, writes Single Music’s Tommy Stalknecht.

By Tommy Stalknecht, CEO and Co-Founder of Single Music

When it comes to how artists monetize their recorded music, the discussion is often centered around streams. How many streams a song earns correlates to money for the artist, after all. But when different streaming sites offer different payouts – with varying levels and fractions of differences–musicians focusing solely on streams will find themselves fighting for pennies.

The answer lies in connecting directly to fans with direct-to-consumer (D2C) sales. To thrive in the industry, artists need to take ownership of their audiences and think more like major retailers. Since artists are seen by law as LLCs, they may as well embrace that business mentality and put in the work. It may sound uncool, but artists who think like retailers–who analyze consumer data and put those insights to work–are going to find themselves earning more from the same amount of effort as they might apply to boosting their streams.

Streaming vs Sales: Know which game is worth playing (and when)

The factors in play when considering payout for streams are complicated. To start, each streaming platform offers different fractions of a penny for streams. That number is always subject to change, along with any other payment agreements. Furthermore, the rates can be affected by where in the world the song was streamed and what that individual’s subscription plan was. 

At the end of the day, though, the differences hardly matter. Even if an artist puts in the mathematical work to determine their optimal payouts, it’s a lot of work to fight for scraps and really that’s all they’re doing. In short, they’re wasting energy on a losing game, when they could be winning a different one.

“merchandise, concerts, tours – these are the money-makers”

This isn’t to say streams are bad, of course. In fact, streaming is a revolutionary and necessary gateway for artists to find new fans in the digital music age. More engagement is never a bad thing. It’s how an artist uses engagement that matters. Merchandise, concerts, tours – these are the money-makers. Direct-to-fan sales put more money in the pockets of artists, and are far more worthy of the time and effort of statistical analysis. While that may sound like a lot of work too, technology makes this far easier and more effective than ever before.

Find Your True Fans

A touring artist may have a decent idea of what merch their fans enjoy and which cities are a must-stop. Generally, t-shirts, hats, tank tops. Concerts in Nashville, Austin, Chicago, and so on. But what if artists had a more specific breakdown of their sales data and fan demographics? What if an artist could know who their top fans are and what part of the country they’re in, whether you’re selling more X-Large t-shirts or hoodies, and what time of year fans in Tokyo are more likely to purchase jackets? Single’s dashboard makes this knowledge possible. 

“There is significant value for artists in knowing who their top fans are.”

There is significant value for artists in knowing who their top fans are – the demographics, the regions, even the time of year they buy certain merch. Single’s Fan Insights includes revenue and location data for fans, a world sales heat map, purchase activity trends, sales-by-type breakdowns, and more. If an artist wants to know which merch items and sizes to stock at their next Nashville gig they can use the data to see what was most popular after their last album drop, for example. If a band needs to know where to plan their tour stops, the data here could, and should, drive that decision. 

To further engage fans, an artist strategizing a release drop could identify superfans – those most likely to support them and spread the word–and plan an exclusive early release specifically for them. All the information gleaned from the Fan Insights is authentic. These are an artists’ real fans–not scalpers skewing data–taking the guesswork out of planning sales.

At the end of the day, artists should treat e-commerce as seriously as department stores do. There is a lot of data out there. Having that data, updating in real time, gives artists the power to make decisions just like the major department stores. Merchandising has long been data-driven, and Single is giving creators the tools to make that work for them on their very own online storefronts. 

Additionally, Single now allows all users to add video to their Shopify storefronts – through livestream events and content rentals – further exemplifying a leap in the creator economy, and an improvement on the creators’ ability to make real money off their merch in digital and physical bundles directly on their own. And with Spotify’s recent integration on Shopify, creators can manage their sales directly from Spotify and benefit from Single’s data dashboard and content monetization.

In bringing the entire operation home, so to speak, artists make an even larger cut of the revenue than even traditional D2C avenues.

D2C sales have never been easier for all creators.

D2C’s place in the industry

For so long the narrative in the music industry has been that artists need to suffer and struggle to “make it.” And while everyone has their own idea of what “making it” looks like, musicians certainly shouldn’t have to fight over fractions of percentages to earn a living in this industry that, as time has shown, provides a vital service to the people.

Rather than an industry obsessed with streams, let’s imagine one where artists see themselves as more than just musicians, but retailers and marketing professionals as well. Artists have always been those, after all.

Now is the time to lean in.